Wages mounting faster than prices, except in Belgium

In most European countries, wages are going up faster than prices, a German study reveals. This was the case both in 2015 and 2016. However, while this applies for a majority of the countries, Belgium is the only exception, together with Greece and Portugal.

Michaël Torfs

Fri 02 Dec 2016 14:12

McPHOTO / INSADCO / Bilderbox

The study was conducted by the Hans-Böckler-Stiftung, a research centre linked to German trade unions. On average, wages in the EU block of 28 climbed by 1.4 percent in 2015, with an actual climb (in relative terms) of 1.7 percent this year. This figure is not so much due to actual salary increases, but more thanks to the very modest inflation rates. 11 European countries even saw prices go down under a so-called deflation.

Belgium is an exception here, as the real wages shrank by 0.5 percent in 2015. Researchers expect a decline of 0.9 percent for this year, which would be the most outspoken drop in the whole of the EU. In nominal terms, we are talking about a tiny wage increase of 0.1 and 0.7 percent, but the relatively high inflation in Belgium makes this a salary drop in real terms.

Employees are making more progress in neighbouring countries. In Germany, salaries saw a real-term rise of 2.6 in 2015 and 2.2 this year. For France, this 1.1 and 1 percent.

Looking at the long-term development between 2010 and 2016, the German researchers conclude that relatively seen, salaries dropped in 11 EU countries including Belgium (-0.2 percent). Employees in Germany (+9.6), France (+5.4) and the Netherlands (+1.9 percent) had more luck.